Moscow — Iran and world powers have agreed to continue negotiations at a technical level over Iran's nuclear program, staving off a collapse of talks after two days of difficult discussions in Moscow, where hard-line positions did not budge.

Both sides portrayed the other as having a "choice" to pursue diplomacy and avert a war over Iran's advanced nuclear program. Israel and some Western governments believe the program aims to produce nuclear weapons, a charge that Iran denies.

Diplomats on both sides used similar language to describe "significant gaps" that remain, and to question how long this process of talks can be sustained. Absent from the five marathon sessions in Moscow were any new incentives, from either side, to signal that compromise is imminent or even possible.

The P5+1 group (the United States, Russia, China, Britain, France, and Germany) held fast to its demands that Iran stop its most sensitive uranium enrichment work, close a deeply buried facility, and ship out its stockpile of 20 percent enriched material. Iran also had to accept "full implementation" of UN Security Council (UNSC) resolutions, which require total suspension of enrichment – and which Iran rejects.

Likewise, Iran held fast to its demand that the P5+1 recognize its "inalienable right" to enrich uranium "at all levels," and to remove increasingly severe sanctions that are damaging its economy.

The two sides late last night agreed to hold a technical meeting July 3 in Istanbul, Turkey, to better "understand" and "study" each other's positions. This is to be followed by contact between political deputies, and finally direct contact between chief negotiators Catherine Ashton for the P5+1 and Saeed Jalili for Iran about a possible next meeting.

No breakthrough initiatives

But, aside from far more detailed explanations of positions, there was little evidence of new flexibility.

"We did not put on the table significant sanctions relief," said a senior US administration official. Instead sanctions would be "ongoing and intensifying" as US measures targeting Iran's central bank and a European oil embargo come into force next week.

"All of our sanctions will go into effect on July 1, and there will be further sanctions to come, so our dual-track policy is not changing," said the senior US official. "Because we are in negotiations, the second track, the pressure track, is not stopping because in fact they haven't taken any concrete action."

"The choice is Iran's ... to decide whether it is willing to make diplomacy work," said Ms. Ashton, the European Union foreign policy chief who represents the P5+1, at the close of talks.

Iran's position

The Iranians, in their turn, say it is the P5+1 that must act first, to reassure Iranians that their rights under the Nuclear Non-Proliferation Treaty [NPT] will be respected, and that sanctions relief will come in exchange for concessions.

"They have the option to take the right choice," Mr. Jalili, the head of Iran's Supreme National Security Council, told journalists after the talks. "Today they are facing a great test, in order to obtain the confidence of the Iranian people. Today they are ... at a juncture of deciding to come out of the deadlock and take steps that lead to cooperation."

Jalili said the P5+1 in these talks were "more objective, more serious, and more realistic," compared to the rancorous round in Baghdad last month that nearly collapsed.

He repeated Iran's rejection of nuclear weapons, and said documents had been presented that "prove" that UNSC intervention in Iran's nuclear dossier was "illegal from our point of view."

"Enrichment of uranium for peaceful purposes in all levels is an inalienable right," Jalili said. "Positive and constructive" negotiations could only proceed if "reciprocal and balanced steps" were taken, he added, and the "aggressive attitude" toward Iran eased.

Who will budge first?

Diplomats close to the talks, on both sides, said afterward that it was not yet clear – after the third round of high-level negotiations this year – which side might budge first.

"We don't want a crisis or collapse of talks," said one Western diplomat. He said that not all of Iran's engagement was positive, and that Iran did not specifically say what steps it was willing to take regarding easing concerns about its 20 percent enriched uranium, which is a few steps away from weapons grade.

Detailed discussion of the fatwa by Iran's supreme religious leader, Ayatollah Ali Khamenei, which declares making or holding nuclear weapons a "sin" and un-Islamic, needed to be "operationalized" by Iran in the view of the P5+1, he said.

"It's not collapse, it's not suspension," the Western diplomat added. But there was also not enough common ground yet to commit to another top-level meeting.

Iranian diplomats close to the talks also expressed pessimism, with one telling the Monitor that negotiations were "not good at all." The final sessions focused on the content of the technical meetings; the P5+1 position was inflexible and "not moving."

"The whole dispute is that P5+1 want to have a technical meeting in order to respond to the issues Iran raised regarding their proposal," said the Iranian diplomat. "While Iran wants to have legal, technical, and political experts to respond to both proposals tabled by each side."

It was clear to the Iranian delegation that the Americans – represented at the table by US Undersecretary of State for Political Affairs Wendy Sherman – were looked to for guidance.

"When something new was raised everyone was looking to Sherman, therefore I think it is important to see how far these countries could go," said the Iranian diplomat.

"It is obvious that sanctions are very important to Iran. Question is whether Americans are ready to ease them," the diplomat told the Monitor. "They are asking Iran to take confidence-building measures while they are not ready to ease those sanctions. I think at this stage they just want to take and give nothing."

Prior to the Moscow talks, Iranian sources said that Tehran's "minimum" requirement was recognition of its right to enrich. American officials have said Iran can eventually have a "peaceful nuclear program" – with no reference to enrichment – though a Western diplomat said "we are a long way from that."

"The expert meeting is still a step forward that can pave the way to an agreement centered on the 20 percent enrichment, as long as it is pegged to the broader issue of Iran's NPT rights," says Kaveh Afrasiabi, a former adviser to Iranian nuclear negotiating teams from 2004 to 2006, contacted in New York.

"[The] Moscow round may well be remembered as another opportunity lost," says Mr. Afrasiabi. "Only when these [P5+1] powers respect Iran's red line on the nuclear fuel cycle under IAEA [International Atomic Energy Agency] safeguards can the present deadlock be broken."

Such a possibility appeared remote on the P5+1 side of the table in Moscow. Said the senior US official: "If Iran wants more from us, which of course they do, then they would have to do more."